report discussion: EEA report “Assessment of Global Megatrends”

In 2011, the European Environmental Agency published a report entitled: “The European environment — state and outlook 2010: assessment of global megatrends.

AIM
Five groups of megatrends were investigated for their potential impact on the development in Europe: Social, technological, economic, environmental and political. The study aims to set out those trends that may influence Europe’s future and prompt questions, such as:

  1. How can we avoid urgent and critical global feedbacks in resource-using systems with limited knowledge?
  2. To what extent should we invoke the precautionary principle given our limited knowledge of environmental risks?
  3. How should we ensure that lack of knowledge does not become a reason for inaction?

This report is rather well-done, concise (which is generally not the case for EU reports), and provides an interesting perspective and insight into how the EEA views the various challenges to come.

While the report might have benefited from more clearly differing between European megatrends and those from the rest of the world (ROW) as well as a sterner analysis of their interactions and feedbacks, the report is a good first step in that direction.

Let’s go through the main points.

MAIN RESULTS AND DISCUSSION

SOCIAL MEGATRENDS

1.     population changes
Population is expected to peak in 2050 at 9 billion and then slowly decline to 8.4 billion by 2100. The 95% confidence interval ranges for 2050 ranges from 7 to 10.5 billion. The report falls short here by simply stating that population growth affects all global megatrends. What is important here is to understand that Europe stands in front of a severe policy dilemma. Europe’s population is expected to slowly start decreasing around 2030, while its population will become older. This has two impacts: a slowdown or decrease in population will ease urban sprawl and help reduce environmental impacts. On the other hand, it will also impose difficulties for the social security systems. Thus, Europe has an incentive to allow for a population inflow in order to reduce stress on its social security, but at the same it would want to reduce population inflow in order to minimize impacts of population growth on local environments. Limited migration into Europe may lead to inter-European competition for European population. For example, Luxembourg wants to significantly increase its population until 2050 in order to help its social security. Poorer countries will lose out in this potential inter-European battle for labour, thus potentially inducing conflicts and stress on the stability in Europe. Consequently, this is a problem that needs to be solved with careful European-wide cooperation and interaction. Better to start early on this rather than late…

2.     Urbanization
Urbanization is expected to increase and by 2050 around 70% of the world population may live in urban centres. Here the report suggests that urbanization increases consumption, social and political unrest if governance structures are weak, and diseases may spread more easily. Apart from the potential disease (see point 3) spread, it is hard to see inhowfar a greater rate of urbanization will significantly impact Europe in the future. Some thoughts on urbanization and ecosystems can be found HERE.

3.     Diseases and pandemics

This has been raised in point 2 and will undoubtedly turn out to be a problem during some point in the future. For the case of communicable diseases like bacterial infections or viral ones, the only thing that one can do against potential disease spread is to establish international cooperation, early warning mechanisms, intervention centres close to airports and large urban centres, and backup plans in case all approaches fail. Oh yes, and stock up on those rare antibiotics of course.

Apart from communicable diseases like bacterial infections or viral ones, there exist non-communicable (NCD) ones like diabetes and obesity. These have seen a significant increase lately and are mostly associated with intermediate stages of economic prosperity. This is mostly a cultural problem though and can be addressed through educational measures. Another approach has been suggested by Catarina Goulao and Agustin Perez-Barahona in their article “Intergenerational transmission of non-communicable chronic diseases”. They suggest that people underinvest in health since these NCDs are still transmitted through society via culture, and therefore the government should tax those activities that increase NCDs. For example, this would turn out to be a tax on alcohol, fast food, etc…

TECHNOLOGICAL MEGATRENDS

4.     Accelerating technical change

“Approving new technologies in regions with weaker risk assessment and governance structures can create risks that could easily spread across our highly interlinked world. Unclear delineation of public and private responsibilities is likely to magnify controversies about risk control and associated costs.”

This is definitely an important point here, see e.g. Fukushima in Japan, nanotechnology in general, etc. How can Europe reduce its risk exposure to potentially dangerous technologies? Quite easily through huge investments in R&D and becoming the world leader in those technologies itself, thereby being able to more explicitly control the producers. This kind of leadership role may diminish in the future if other regions turn out to be technology leaders and more innovative, but there is nothing that stops Europe from furthering and developing its technology leadership, investing more money in R&D, etc. Nevertheless, currently Europe as a whole is still a fair step away from spending significant sums on R&D.  Plus, there does not seem to be a Europe-wide cooperation on R&D spending, with only Sweden and Finland spending more on R&D /GDP than the US, while many European countries spend less than 2% of their GDP on R&D.

ECONOMIC MEGATRENDS

5.     Economic growth

“Rapid growth accelerates consumption and resource use. But it also creates economic dynamism that fuels technological innovation, potentially offering new approaches to addressing environmental problems and increasing resource efficiency.”

It goes without saying that economic growth affects every aspect and every other global megatrend. What is missing in the report is a clearer picture of whether and how it would make sense to turn to alternative approaches to measure wellbeing, and thereby giving economic growth less of a headline than is generally being done.

6.     From a unipolar to a multipolar world

“Global power is shifting. One superpower no longer holds sway and regional power blocs are increasingly important, economically and diplomatically. As global interdependence and trade expands, Europe may benefit from improving its resource efficiency and knowledge-based economy.”

Furthermore, ” [w]hen countries grow relatively fast they gain in economic power through their enlarging production and consumption markets. They are able to exercise that power at international negotiations on economic matters (such as trade barriers and product standards) but also in a wider sense, including participation in climate change and other environmental negotiations.”

Although this is an understandable assessment from the European perspective, it is an unfortunate and absolutely non-cooperative approach or worldview. More on this below.

7.     Intensified global competition for resources

“How will Europe survive in the intensifying scramble for scarce resources? The answer may lie in more efficient production and resource use, new technologies, innovation and increasing cooperation with foreign partners.”

Nothing to add here apart from the question of why the report did not think of the possibility of opting/pushing for a self-sufficient Europe? More on this below.

ENVIRONMENTAL MEGATRENDS

8.     Decreasing stocks of natural resources

Here we are still talking about deforestation (though less so in Europe), biodiversity loss, urban sprawl, soil degradation, etc. While there is a relative stability of natural resources in Europe, this is less so the case for the other parts of the planet. To prevent spillovers from these regions to Europe, through e.g. also climate change or inter-regional pollution, only a changing consumption habit and international cooperation will work. See below.

9.     Increasingly severe consequences of climate change

“Accelerating climate change impacts will threaten food and water supplies, human health, and terrestrial and marine life. Europe may also see more human migration and aggravated pressure on resources supplies.” While this is likely to be true, it must also be said that the expected human migration from e.g. sub-Saharan Africa, one of the regions that is currently and is expected to be impacted the most, will not be too large and manageable. For example, estimates by Marchiori, Maystadt and Schumacher (2012) suggest that by the end of the century, we might see 12 million migrants from sub-Saharan Africa to the rest of the world. Not all of these will migrate to Europe of course, and if they would, it would be roughly 1.7% of Europe’s population in 2100.

10. Increasing environmental pollution load

In contrast to e.g. CO2, pollutants like ground-level ozone, or particulate matter tend to be mostly local pollutants. Most of these are still expected to increase as they are a by-product of production. However, since they are local pollutants, it is unlikely that their production in the rest of the world will have a significant impact on Europe in the future.

POLITICAL MEGATRENDS

11. Environmental regulation and governance: increasing fragmentation and convergence

“The world is devising new governance models, including multilateral agreements on numerous issues and public-private ventures. In the absence of global regulation, advanced European standards and procedures have often been adopted worldwide.”

Here the report starts to develop into the direction that I would have liked to see from the start. As seen in GMT 11, Europe has been and still is a role-model, especially in terms of setting standards and procedures that other countries eventually follow.

SUGGESTED FURTHER THOUGHTS

So these global megatrends bring about three important potential ways in which Europe could/should develop in the future. These three ways have synergies and are not mutually exclusive.

Firstly, Europe should try to become more self-sufficient, or as independent as possible from other regions. The much-discussed Common Agricultural Policy is an important step in that direction. One problem for self-sufficiency is that Europe has very little or no stocks of several critical resources, like coal or oil, at least at competitive market prices. For this reason, R&D in alternative energy resources, or raw material inputs, should be more strongly supported. Naturally, the more independent Europe is from other regions, the less will the GMTs (especially GMT 4-8) from these regions affect Europe.

Secondly, Europe should start a better cooperation internally. This would give it some leeway in international treaties (GMT 6 and 11). At the same time, it would ease on those population dynamics, and thereby help a more coordinated and socially optimal approach to reduce stress on its aging social security systems (GMT 1).

Thirdly, Europe should move towards a more integrated measure of wellbeing, or progress, than is being represented by GDP. This will take into account effects related to GMT 7-10, since then more importance will be placed on environmental effects that affect wellbeing than in the traditional approach to GDP. While it is well-known that alternative measures of wellbeing have shortcomings of their own (https://ingmarschumacher.wordpress.com/category/sustainable-development-goals/, or www.oecd.org/std/na/36967254.pdf‎), it is important to recognize that only one dimension of wellbeing is being captured with GDP, namely that of consumption. While it is true that other measures are strongly positively correlated with GDP, like health or even happiness, it is also important to recognize that other measures are negatively related to GDP, like biodiversity, urban sprawl, resource use and several types of pollutant. Similar, other social indicators, like personal stress, or number of divorces, social care, tend to be negatively associated with GDP. Consequently, it would be useful to address these with a more inclusive measure of wellbeing.

UPDATE: The EEA is now updating the various chapters of this report. Stay tuned!

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